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Plus, global business, finance, and tech

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Carol Masser and Tim Stenbec on

Bloomberg Radio. [music] Carol Masser,

Tim Stanbec, live here at Bloomberg

headquarters in New York City. Uh just

minutes away from that closing bell.

We've got stocks lower, US yields are

higher as Fetcher Jay Powell said higher

energy prices will push up overall

inflation. And as expected, the Fed

leaving interest rates unchanged once

again here, Tim.

>> Yeah, continue to expect one rate cut

this year due to increased uncertainty

from the war in the Middle East. I think

the big takeaway that I had was just how

muddled of a view

>> Yeah.

>> everybody on the FOMC has moving

forward.

>> It's just like us.

>> Truly,

>> there's a lot of

>> like us and everybody we talked to.

>> There's a lot of unknowns. We should

point out officials raised both their

growth and inflation forecast for the

year. Fed Governor and Trump ally, I

think it's safe to say Fed Governor

Steven only to center at this meeting.

And I feel like we kind of buried the

lead. Here's Fed Chair Jay Powell at the

press conference. I have no intention of

leaving the board until the

investigation is well and truly over

with transparency and finality. And I

would refer you to the statement that

was in the Fed's brief that you will all

have seen and I won't have anything more

for you on that. On the question of

whether I will then continue to serve as

a governor after my term ends and after

the investigation is over. I have not

made that decision yet. Uh and I will

make that decision based on what I think

is best for the institution and for the

people we serve.

>> Well, there you have it. at Fed Chair

Jay Powell earlier today at the FOMC

press conference. That next FOMC

decision, by the way, April 29th, 2026,

with more on today's Fed decision and

market reaction. Let's bring in Greg

Peters, PIM fixed income co-chief

investment officer. PIM as a whole is

approximately $1.5 trillion in assets

under management, about a trillion in

fixed income alone. Greg joins us here

in our Bloomberg Interactive Brokers

studio. Okay. So, we we'll talk about

the decision. We'll talk about the

market reaction, but but first on the

sound that we just played from Jay

Powell, just the idea that he will stay

at the central bank until after the

Justice Department's investigation is

complete. That was some of the biggest

news that we that we heard today.

>> Or was it in your view?

>> No, I think it was the the clarity. It

was something that was hanging over the

market. Um I think the insider view was

that he would stay on uh because he

cares about the institution. But the

pointedness and the clarity in which he

made that statement was somewhat

surprising. Uh so I do think that was a

big market mover uh today. Um and uh you

know instead of lower for longer it's

PAL for longer and it's that's what the

market's trading on.

>> I I like that power for longer. Carol I

mean t-shirts and hats being made.

>> I love when he was like I know you guys

are going to ask about this.

>> Here's what I have to say and that's all

I'm going to say on the matter. But

what's interesting is he actually did

say something. A lot of times he's like,

"Folks, we're here to talk, you know,

basic stuff like we're here to talk

about the economy and rates." And he

went for it.

>> It's great, right? Clear speaking out of

a Fed uh chair, I think, is uh is maybe

a trend.

>> Greg, why are we though? I'm looking at

what's happened in terms of the trade.

We're pretty much hovering near our

lows. We've seen stocks certainly sell

off uh rather dramatically. S&P was off

about 40 right after the decision. We're

now off about 87 points, down 1.3%.

Let's talk to your world in terms of

what we see in in the fixed income in

Treasury trade. Uh I'm looking at a

10-year with a yield of 425. It was

about 421 right after the decision.

Shorter end uh 376 we're at about 370.

So we've definitely seen a change in the

yields. Why is it? Is it because

specifically what Fed said about maybe

the potential for energy prices and the

and and the push on inflation or what?

>> I think it was a twofold. uh the the PAL

announcement [snorts]

uh definitely had an impact. So that is

you know PAL for longer is higher rates

right that is the perception rightly or

wrongly uh you know from the

marketplace. Um what uh and the second

was uh on uh less he what he basically

said he's not overly worried about the

labor market which is you know means

that uh he can keep rates higher uh uh

and watching inflation which is

basically once again code for keeping

rates higher. So I think the

interpretation from the market was just

exactly that rates are higher um and uh

it's being priced in the front end as

you see um and the curve is actually

modest modestly flattening not

steepening

>> otherwise it'd be a big steeper

>> as Carol and I huddled after after his

press conference and and before the

program we both pointed out the tariffs

making sort of a big uh a big presence

in the speech today given or and then

press conference today too and in his

answers today were Were you surprised

about his commentary regarding tariffs

that uh you know

>> goods inflation right like should we be

worried about still

>> I thought I thought the impact had hit

and I think a lot of economists thought

the impact had hit and it was I'm not

going to say transitory but it's like it

wasn't as big as people thought it would

be.

>> Well, you know, if you look back in

2025, the biggest mistake that market

players and economists made was thinking

it would be a one-time hit.

>> Yeah. Well, and what we learned is that

it's a it's a kind of a continuous kind

of hit, right? It's not a one-time

shock. It just leaks out over time. And

I still think that's in the system. Uh

so the way we think about it, the way I

think about it is that that goods

inflation uh is still coming through the

system. For example, um at the end of

last year or just in course of talking

to over, you know, a thousand companies

last year, yeah, they basically all

total told us the same thing, which is,

you know, they haven't moved prices up

yet.

>> Yet, we will do so

>> in the first quarter, first half of

2026. So, I I think he's reflecting that

reality, honestly. Well, I keep thinking

about I mean you know me I'm kind of

obsessed with earnings reports but I do

think about you know seuite commentary

and what we hear from them mind you

it'll be you know obviously the last

quarter but it also be the outlook and

whether or not they are saying they're

feeling pressures uh whether it's on

margins and so on and so forth and so

what do they do to compensate for that?

Well, I think you see that uh in the

labor market, right? So, you're not

seeing a shedding of jobs in labor, but

you have this

>> incredibly stagnant labor market. So,

you could blame AI, you could blame on

protecting margins. I'm not really sure.

Uh but, you know, that is a kind of a

reflexive response from corporations,

right? So, they'll defend margins,

they'll raise prices, they and and

they'll kind of keep labor flat. And

that's what you see.

>> Yeah.

>> What does AI do to the economy? He was

asked he's asked about this every time.

Yeah.

>> And and I think I mean and I think his

his answer again it's it's it's sort of

like it's kind of the question that that

I would ask him if I had a chance to sit

down with him and the car Emmers weren't

on. He said you can't really make a call

at this point about whether Gen AI will

lead to lower inflation, but over the

long term it's possible. It expands US

output and productivity. What's your

view on it?

>> My view uh comports with his. Um a lot

of investors think it's just immediate

kind of disinflationary effect. Uh the

way he described it and which I agree

with is that the spend and the draw on

resources that you're seeing today is

actually inflationary. So it's a

two-step process and those things cost a

lot of money and the demand is high.

>> Exactly. Think about like trying to get

an an electrician as an example. Right.

Uh so

>> we just did this past week, you

[laughter] know. So, so and I bet you

you paid more for it. So,

>> always a joy.

>> So, it's inflationary over the near

term. Over time, the expectation is that

it is disinflationary, but we have to

ride ride the wave and um you know, it's

hard to make that timing assessment.

>> Jay Powell did well.

>> I thought he did actually. You know,

this was supposed to be a a complete

non-event in a way, right? I mean this

is we were talking at a risk meeting

this morning and this is the first time

that we can recall in years and years

that like the Fed meeting wasn't even

like a topic of conversation right and

now it's a topic of conversation so I

actually think it was a pretty good

meeting

>> um but I liked his directness um and um

you know the markets less so clearly uh

but you know I think the markets are

somewhat in kind of fantasy land here as

well so it's uh it's kind of a

>> kind of a eye opening type of

environment.

>> Stay with us. More from Bloomberg

Business Week Daily coming up after

this.

>> You're listening to the Bloomberg

Business Week Daily podcast. Catch us

live weekday afternoons from 2:00 to

5:00 Eastern.

>> Listen on Apple CarPlay and Android Auto

with the Bloomberg [music] Business App

or watch us live on YouTube.

In an exclusive interview with

Bloomberg, Kali co-founder Tar Mansour

vowed to fight criminal charges against

the prediction market exchange calling

Arizona's recent movie quote total

overstep as legal battles with states

escalate beyond civil enforcement.

>> Yeah. It was just Tuesday that Arizona

filed criminal charges against Khi for

operating an illegal gambling business,

citing misdemeanors that carry less

serious penalties than felonies.

Arizona's criminal complaint follows

Kelshi's move last week to block the

state's gaming department from taking

enforcement action against the company.

>> I spoke with Khi co-founder and CEO Tar

Mansour on Bloomberg radio and TV about

the charges.

>> Look, I mean, these charges have nothing

to do with uh gambling or the merits. Uh

if it was about gambling or the merits,

they would let the judicial process run

its course in the federal courts. You

know, 5 days ago on Thursday, Kali filed

suit against Arizona in federal courts

on the merits on whether Kali is subject

to exclusive jurisdiction of the CFTC.

Um, and you know, we're confident in our

position and wanted to let the court

process play out. And instead of letting

that happen, uh, the Arizona attorney

general decided to subvert the judicial

process um, and weaponize it and go to

state court and file these criminal

charges uh, which, you know, we view as

meritless and baseless. We see this as a

total overstep uh, and we look forward

to fighting it in court. Well, experts

are saying this could be the first of of

many charges such as these from from

other states, too. How does it change

your legal strategy?

>> Well, this is the whole point of federal

preeemption. So, so this is not about

gambling. The the the charges that the

attorney general filed are not about

gambling. They're not even about sports

only. They're about prediction markets

writ large. It's just, you know,

attacking the entire business model. And

nothing prevents from the same attorney

general or others from filing the same

criminal charges against derivatives

markets writ large. could file the same

exact charges under the same analysis

against CME or ICE or NASDAQ.

>> And that's the whole point of federal

regulation of these financial exchanges

is to prevent this sort of chaos and

this these sort of attacks on these

businesses that could be political in

nature or other. Um and and that's a

very important distinction.

>> Well, I read the charging document from

the attorney general. It has 20 charges

and they're mostly about betting and

wagering when it comes to sports.

There's some election stuff in there.

Would you ever consider limiting your

business in Arizona or other states to

to things that these AGs don't seem to

have problems with like economic data,

the price of Bitcoin, what markets are

going to do, predictions around those

things?

>> Look, I mean, the AG also claimed that

we have war markets, uh, which is

incorrect. It's either flat out the lie

or it's misinformed take, which is

unfortunate for someone that's, you

know, filing criminal charges against

the company. What's more important here

again is this is not about the merits.

If it's about the merits, let's let the

judicial process run its course in

federal courts. This is about something

other than the merits, uh, which is what

I'm focused on. I don't know what the AG

is focused on, but, you know, she is off

for re-election. Um, you know, it it

does, they did some press. It does seem

to be, uh, making some buzz. Uh, but

what I'm really focused on is building a

great product for our millions of

customers, out of which close to 400,000

are in Arizona, and fighting any of

these baseless, uh, cases in courts,

which was which we're going to continue

doing. So you're fighting the cases. As

I mentioned, Arizona is not the only

state to take issue with your business.

What happens ultimately if courts do

side with states? What does it mean for

the future of your company?

>> We believe in the rule of law, right? We

will always abide by court decisions.

The law applies to us, but it also

applies to the government, including

state governments. And that's a very

important thing, right? This is really

not about our business model. Again, if

it was about our business model, we

would be focused on the federal uh

courts and the lawsuit about the merits.

Uh this is a broader attack. Um and you

know, many states have sided with us and

have grant us a preliminary injunction

agreeing with our legal analysis. We

have spent four years getting regulated

by the federal government. And we have a

federal government in the CFTC that is

coming strongly in favor of our

position. Filing these charges is a

total total overstep and an overreach uh

from an AG that's up for re-election and

we find that unfortunate but we will

stay focused on what we do best which is

building a great product.

>> So certainly the the CFTC we know where

the the CFTC stands and we know where

Michael Mike Celig stands on this. We

don't know where courts stand on this

and and I'm wondering if if if we see a

state like Nevada for example block

access to your business, what will you

do? Will you continue to operate or will

you will you say okay we're not going to

operate in Nevada?

>> Well f first of all let's get let's get

to that point and you know we'll have to

make a decision as a company what we do.

What I can reiterate is we will 100%

abide by the law. That's what we will do

as a company. It's always been our

position. That's why we spent four years

getting regulated up front regulatory

first as a company and always abide by

the law. But what I always say the law

applies to us as much as it applies to

the government. And when government

oversteps the law and goes out of bound,

we're gonna fight that in court, which

we look forward to.

>> How long does that process take? Because

it seems like there's a a regulatory

limbo happening. You're you're it's

almost like your legal team is going to

have to play whack-a-ole with all these

states that are that are filing suit or

or bringing criminal charges. What how

long is this going to take?

>> And gladly we have a legal team to

handle these types of things and what

they're going to be focused on. And you

know, maybe it's a it's a question for

them. I mean, look, whatever whatever

long it takes, we're going to fight for

prediction markets. I spent eight years

building this company, four out of which

half of which are getting regulated up

front. I really believe in this

marketplace. I'm very excited about the

growth that we're seeing. It's one of

the fastest growing company companies in

America right now. Um, and so what I'm

going to be focused on is keep building

a great product and that's what's sort

of most important for me. The the the

more important sort of question is, you

know, when you when it comes to this is

not really about, you know, whether this

is gambling or not. It's not really

about state versus federal, which are

both coexisting and both growing, both

models. This really is turning into sort

of some special interests that like the

status quo. The status quo is working

very well for monopolies, but not for

the consumers that are flocking to

prediction markets right now, which

we're going to keep fighting for.

>> Tar, there is this perception though

that people think this is gambling. An

Ipsos survey from just a few weeks ago,

for example, shows 61% of adults say

prediction market trading is closer to

gambling. 8% say it's closer to

investing. So there is this public

perception that doesn't necessarily

match with what you say the platform is.

How do you respond to that and how do

you battle that? Like how is this not

gambling?

>> I haven't really looked at these uh uh

polls. Um you know the thing I will say

is there's always been a battle of

whether financial derivatives are

gambling. grain futures were called

gambling in in the 1800s and there was a

Supreme Court decision that you know

said even though there is speculation

these you know products have financial

are structures the financial markets and

thus are going to fall under financial

market jurisdiction so I always say this

you know whether something feels and

looks like gambling doesn't necessarily

make it gambling speculation exists in

all financial markets if we're going to

take a line that speculation is gambling

then the stock market with retail

participation is gambling then buying

options for retail or zero the expiry

options is gambling. Then retail buying

crypto is gambling. The more important

line and the historical line that we've

been taking under the law, but also you

know as we think about it society is is

the business model a gambling business

model which is a model where the revenue

of the business and the profits are

equal to the customer's losses in which

case the incentive is to promote more

losses and block the winners or is it an

open free and fair marketplace where

people can enter in and out freely and

transparently which is a financial

exchange which Cali falls under. That's

Kalchi co-founder and CEO Tar Mansour.

An exclusive interview on Bloomberg.

Let's stay on Colchi and prediction

markets overall. Here with us is a

member of our team who keeps track of

them. She reports on them. She's

Bloomberg news cross asset reporter

Denise Sakova. She's here in our

Bloomberg interactive brokers studio.

Denita, the last question about gambling

that that this when I got off air after

this interview, I had IBS from

customers, from uh colleagues. Uh some

people came up to me, every single one

of them said to me, "How is it not

gambling?"

>> That seems to be the question that will

be the biggest uphill battle for this

company because that's what the courts

are going to decide.

>> It has been the big question we have

been covering for months. Uh if you

speak to a lot of those CEOs, they're

going to tell you we're a truth machine.

We got we're so important from

probability. Hedge funds will able to

hedge those super niche markets. But if

you look at the volumes, it's often 60

80% in certain cases 90% sports bets and

then it becomes really hard to explain

to people how this will have economic

hedging or uh any other value. Uh that

said, every platform is different. Koshi

is especially strong when it comes to

sports betting. uh poly market is seeing

slightly different uh uh breakdown there

but for example crypto markets are

really big there political markets are

really big there and of course sports is

big there uh but so far they've seen all

that push back it's not gambling we're

regulated by the CFTC like in the

interview he talked a lot about oh if

they sue us they can sue the CME and I

think that's kind of a complicated

argument to make considering there

aren't really other companies opening

anything like that obviously they were

under a lot of scrutiny for sports, but

we got scrutiny for war contracts for a

lot of things.

>> There are other companies that offer

this. It's like FanDuel and DraftKings.

>> Exactly. And those are regulated by

states.

>> Exactly. That's that's where the

>> What do the states want? I mean, is it

that they want to be able to regulate

these companies under state gambling

rules? What is it?

>> I mean, of course, those don't have the

same protections as sports markets, but

you can also imagine that states are

losing a lot of revenue that usually uh

they take from those company. Uh

nevertheless, we've seen some of the

sports betting activity fall in some

states. Uh we've seen a really

>> curious about that at the traditional

gambling sites. Are they losing some

activity?

>> Yeah, we've definitely seen that. And

when it comes to app downloads, it's

really couch soaring. It's like I don't

know 3 million downloads a week a month

and that has nothing to do with like the

numbers we're seeing for example from

DraftKings which is kind of a leader in

that space. So they're definitely taking

over. Uh but at the same time we're

seeing kind of states combine forces and

file all those lawsuits at the same

time. So there is a lot of unity on the

state side when it comes to their

response.

>> I thought it was interesting too Tim

your question about like if they limit

their what type of activity? So maybe

they walk away from the sports gambling

right and then it's economic like is

that still a viable business?

>> I mean look what Denita said uh 60 to

80% in some cases some cases up to 90%

of the activity on these platforms. But

I'm not going to say Kali specifically

and it varies based on what's going on

in the news but that that is the bulk of

the activity on the platform. So if they

were to do that Denise it would really

limit what they offered.

>> Yeah for sure. And even you can see a

lot of their marketing campaign ad

campaign. There is a whole new campaign

house you can win 1 billion if you get

all the brackets in m in March Madness.

And I don't know how can you explain

that this is like oh a truth machine if

you're uh if you're offering a contract

like that and you're really emphasizing

those super long shot bet like it's one

in 120 billion chance.

>> 30 seconds got to ask both of you is

this something that ultimately makes its

way to the Supreme Court like where does

it because the momentum seems to be

building certainly the legal momentum.

>> Yeah I think that's pretty much the

consensus we have a pretty good estimate

by the bloom by Bloomberg intelligence

they say pretty much headed there. That

said, they give uh Koshi 60% chance of

winning in high court.

>> You're listening to the Bloomberg

Business Week daily podcast. Catch us

live weekday afternoons from 2:00 to 5

Eastern.

>> Listen on Apple CarPlay and Android Auto

with the Bloomberg Business App

>> or watch us live on YouTube.

All right, everybody. We are watching

Micron here in the aftermarket. It's

been bouncing around. We saw it kick up

a couple percentage points. Right now,

it is just up about 4/10en of a

percentage points. Uh the numbers look

certainly pretty strong here, but we as

we just you know talked about with

remain this stock's on a tear up more

than 60% year to date and that's after a

tripigit percentage gain last year.

>> Expectations were high. SanDisk uh is

following Micron stock lower in the

after hours down about 8/10en of 1%.

Worth repeating some of those headlines.

Carol, uh, third quarter adjusted

revenue forecast did beat estimates

32.75

billion to $34.25 billion. The estimate

was for 23.66.

Adjusted EPS 1875 to 1955. The estimate

was for 1129. When I see numbers like

this, I'm like, I have to check this

again because these are so different

than what the estimates said.

>> But the expectation like sometimes these

numbers are just off the charts. Micron

also saying that AI server demand

continues to be strong. So we're going

to continue to track this here in the

aftermarket. Uh let's get to our guest

Hendy Susanto. He's a portfolio manager

at Cabelli Funds. They've got about 35

billion in assets uh under management

and they also of course hold Micron

shares. Hendy, so glad that you could uh

join Tim and myself. Um what do you make

of this report?

I guess this is um I believe this is the

strongest record performance of Micron.

And then looking at the way the share

trade I think going to this earning I I

I I did think that the biggest risk is

investor high expectation and then um

fiscal third quarter guidance is very

strong is way surpassing um analyst

expectation and then my own expectation

as well. And then gross margin is the is

the strongest in in the in the history

of micron. Um and then we are still in

the early innings of um HBM as like

precious semiconductors.

>> We have precious metals and then now we

have precious semiconductors.

>> So so Hendy then why I mean the stock

reaction is only up 8/10 of 1% despite

the fact that like you said this is such

a record. It it you know I think many

people would say this was an incredible

beat. I want to go to the conversation

that we were just having with our

colleague Roma a few minutes ago which

is about how much pricing power and how

much sort of runway does Micron have to

continue with to raise prices and to

continue to have these margins like how

long does that last?

>> Yeah. So in terms of pricing power I

think we can start um based on the fact

that there are only like three DM

manufacturer uh SKH highix, Samsung and

Micron. Okay.

>> So like structurally Micron is in good

positions and then we believe that

pricing is now um based on quarterly um

negotiation. Uh so companies like Micron

they will try to capitalize on the

pricing trend. uh the pricing trend is

still going up um at least until the uh

until the June quarter. Um and then um

companies like Micron will try to

balance between um taking the pricing

advantage and managing long-term

customer relation relationship uh while

also um um trying to u manage um uh

customer diversification as well.

>> Yeah. Yeah. Right. Because we do know

that in terms of um who are their big

customers, it's definitely skewed is it

towards Nvidia 7%.

>> It's kind of a lot. Hendy, one thing I

want to ask you as the headlines

continue to cross uh Micron says nan

demand to stay well above our available

supply AI other server demand

constrained by memory supply and says AI

server demand continues to be strong. So

this is kind of a mixed blessing. Demand

is there but they're having trouble

meeting that demand. Is that is that the

right read on this?

>> Uh that's the right the right read. And

then I think what what investors should

should keep in mind is that this

calendar year 2026 all the memory makers

will re uh we rely on uh migration of uh

their process technology. So in other

words there won't be any new capacity

expansion and then capac capacity

expansion uh we are we are expecting um

that to come in 2027. So I think for the

2026 um when when companies said that

they are sold out on capacity that will

be indeed u true and then that will come

with favorable pricing as well.

>> The company also uh flicking at this

idea that they're going to build out to

match expectations and match demand. You

did say that we're in the early innings

of this and I'm going to get right here.

It says uh we are investing in global

manufacturing in our global

manufacturing footprint to support their

growing demand. referring to customers

that's the words of Sanjay Morocha the

pre president chairman and CEO of Micron

how long does it take to to build that

out so I think in general the rule of

thumb in the industry is if you have the

shell uh or the fab um buildings

um and structure uh you can expect new

capacity um

within like 6 to 12 months

and then after that then you will have

to work on the yield optimization.

>> Okay.

>> Uh so that that is the sort of time

frame that we are looking.

>> So 6 months until if the shell is there

they can be up and running and they can

actually

>> you know like what if you have a if you

have the shell it can be done as as as

short as like 6 months.

>> Yeah. Um, yeah.

>> Well, I'm I guess this is another way of

asking you. Look, you said we're in

early innings, but we always talk to Ian

King who covers chips for or

semiconductors for Bloomberg News, and

he he reminds us this is all cyclical,

but we're just trying to figure out

where we are in the cycle. So, where do

you think we are in the cycle?

>> So, I I still think that uh we are still

in the early innings. Um m many major

customers, their priority is to secure

supply and then pricing is secondary.

And then if somehow there's a disruption

within one customers um companies have

said that um they can find other major

takers uh easily um and then on the

other hand I do think that uh it is the

best of interest of customers to secure

long-term uh supply agreement. Let's say

when you build a large AI AI data

centers or when you want to spend on

like GPUs, you want to make sure that

you will have supplies of um memory u

memory chips uh for you.

>> Hendy, it's been an interesting week,

right? And I feel like we've um talked

about a lot of things when it comes to

AI but and chips and semiconductors

because Nvidia, of course, it's GTC

meeting this week. Got a read certainly

on the AI spend and build and what's

going on. Here we have uh Micron and of

course Micron as Tim you know reminded

us 70% of their business goes is from

Nvidia. Is there a read through for you

when it comes to that AI spend and

buildout?

So the AI spending built out I think it

will benefit all the major players and

then I would also emphasize that all the

capital equipment um that have major

exposure to DRM will see um like strong

year in 2027

um driven by uh like new capacity and

then capital spending on on the on the

fab side.

>> Yeah. So, so I'm just curious. Are you

would you buy more shares of Micron on

this uh earnings report or are you

waiting for the call? I'm just curious.

What do you think?

>> Uh I Micron is definitely a strong buy

here. We can see Micron um earning about

like uh $40 on uh like in in this

current fiscal year and growing to at

least like $50. So if someone wants to

apply like 10 to 15 times of price to

earnings ratio uh there is still like

meaningful upside based on that

valuation approach.

>> All right just to think 15 seconds. What

are you listening for on the call? What

do you need to hear really quickly?

>> I I think like pricing negotiation and

then what uh what the latest thought on

the capacity expansion like how soon new

capacity can come to the uh to like

micron fabs.

Stay with us. More from Bloomberg

Business Week Daily coming up after

this.

You're listening to the Bloomberg

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>> Listen on Apple CarPlay and Android Auto

with the [music] Bloomberg Business App

or watch us live on YouTube.

Hey, let's get more on the energy

markets and really the economic and

geopolitical uh implications. Back with

us is Bloomberg economics chief

geoeconomics analyst. [music]

She's Jennifer Welch and she's live from

the Bloomberg uh Washington DC bureau.

Jenny, good to keep uh checking in with

you because I do feel like there's so

much to keep track of and it does kind

of shift a little bit. Um first and

foremost, Iran's hold on the energy

markets right now and how it impacts the

world differently. Which brings us kind

of to China. They continue to get oil

from Iran. That's true.

Yeah, it does seem like some of the

tankers that have been able to make

their way out of the straight of Hermuz

once the war started have been linked to

Iran, but also potentially linked to

China and delivering oil there. We

suspect Beijing is probably negotiating

behind closed doors to Thran to keep

that oil flowing. And for its part, Iran

seems willing to work with China, but

also other countries. India and Pakistan

have also potentially been beneficiaries

here to essentially allow their vessels

to come through in order to pick up oil

uh and other resources and transport it

back to those economies that are facing

a real need for that supply.

>> Right now it seems like uh Iran and

Israel are are are trading strikes on

key energy facilities in the Middle

East. it and I wonder Jenny to what

extent this makes it more complicated or

challenging or difficult for markets to

sort of go back to where they were when

or if I should say when this conflict

ends. Qatar's uh Ross Laughen industrial

city suffered extensive damage after an

Iranian attack and facilities in Qatar

Saudi Arabia and the UAE were on a list

of sites at risk of Iranian air strikes.

How do you watch that from a

geoeconomics perspective?

Yeah. So, this seems to be Thrron making

good on its threat, following an Israeli

strike on its gas fields earlier today

to hit other facilities in the Gulf. So,

it's more that the Israelis are hitting

Iran and Iran is hitting Gulf rather

than Israelis and Iran directly trading

strides. The Gulfs are kind of taking

some incoming even though they're not

directly party to this conflict yet. I

think the what this highlights is that

even though we're 3 weeks into this war,

it doesn't show any signs of

deescalating anytime soon. And we

predict that this higher level of

intensity of conflict could continue for

at least another week or two and then

potentially subside. Although we don't

anticipate a ceasefire anywhere close.

Rather, what we anticipate is that

maybe, for example, the United States

will pull out. President Trump does seem

to be looking for an exit ramp and that

could take some of the intensity out of

the conflict, but by no means

necessarily put it to an end and indeed

we're likely to see a risk continue to

not just traffic in the straight of

Hermuz, but also to the Gulf and energy

infrastructure there. Iran realizes now

it has a rather powerful toolkit that it

can play and it's likely to continue

leveraging that whenever it feels that

it's being threatened. Jenny, you

mentioned something that really raised

my eyebrows just now, and it was the

idea that some of these geographical

neighbors aren't part of the war yet.

You use the word yet. Are you implying

that that you think that other countries

will enter this war?

>> I think that other countries, well, they

might define it differently. Some of

them might say that they've been dragged

into it because they've been having to

shoot down projectiles coming out of

Tyrron. I think they are receiving

pressure from the United States to enter

in some way, shape, or form. We've seen

President Trump talk about not just

trying to enlist US allies and other

countries like China in reopening the

Straight of Hermuz, but having rather

positive things to say about the

prospect for Gulf countries to assist

with that. Now, our assessment is that

the vast majority do not want to be

parties to this conflict. They don't

certainly want to get directly involved.

Maybe some of them are allowing US

forces to, for example, use their

airspace, but they're very wary of

giving Thrron any additional reason to

target them. Hey, one thing I want to

get to before we wrap up here. China

watching very closely. As Bloomberg has

reported, China's military has been

studying President Trump's war in Iran

for lessons that could prove helpful in

any future conflict of its own. That's

according to Western officials familiar

with the matter. Um gosh, what do we

need to know about this?

>> I think the main thing to know is that

China watches every conflict very

closely, as do many US observers as

well. But what China is watching for is

lessons on how to defeat the US

military. And here I think that they've

probably taken away that this was

obviously especially at its initial

stages a very impressive display of

firepower from the US military. But now

what they're probably noticing is that

the US is using especially at the higher

end a lot of munitions that would

theoretically be useful in any fight

with China. And I think that's what

they're tracking closely. I think also

at a strategic level what they're

watching is especially with all this

debate over reopening the straight of

Hermuz that this is creating friction

points between the US and its allies and

that the US is especially when it comes

to Asian partners having to withdraw

some assets from that theater in order

to back up what it's trying to do in the

Middle East. So those are some of the

dynamics that Beijing is going to be

watching very closely in the weeks

ahead.

>> So Jenny 5 seconds advantage to China

perhaps just quickly.

>> I think strategically yes. This is the

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